Virtual Estate - An Illusion?

Metaverse is a next-generation system that delivers content and services, probably why it is referred to as the evolution of the internet. Just as radio served as a platform for music and audio content, metaverse will be the foundation for web browsers with organized data and information on web pages and platforms.

Metaverse is a shared, immersive, and "always on" layer of reality added to the form of a spatial internet.

Virtual worlds like Decentraland and The Sandbox, which can presently be accessed online, are places that deliver this new generation of information and services. These virtual worlds can be simply described as "websites you can walk through." Similar to computer games, such as The Sims and World of Warcraft, one can collaborate with others to complete chores, consume content, make purchases, and more.

One can observe and interact with services and content in the actual environment through augmented reality-based projects such as OVER and SuperWorld. Imagine Pokemon GO, but with smart glasses that seem like regular spectacles that are in fact smart. Hand motions, vocal instructions, and controls on the glasses will be used to communicate with them. Your current smartphone apps and content will be transferred and put front and centre in your range of vision.

They'll make activities like dining out, banking, choosing a restaurant, ordering a taxi, and socializing easier and more intimate parts of our daily lives.

What is metaverse real estate?

Real estate in the metaverse is constructed of pixels and is for sale. It is a non-fungible token (NFT) that gives the possessor digital proof of ownership over real estate on a metaverse platform. The procedure is quite identical to purchasing actual property.

Numerous metaverses are available to browse, for example, Decentraland or The Sandbox. Even companies like Google and Microsoft are seeking to build their territories in metaverse. It might be worth millions of dollars depending on where your home is located. In actual currency. For example, popular locations like the Decentraland fashion district. In most circumstances, the land may be used to produce scenarios conducive to marketing, socializing, entertainment, and more. These aspects, as well as general market attitude, collectability, and platform popularity, affect the value of each plot of land.

How does land derive value if it exists virtually?

Although the internet may be infinite, a metaverse is not.  Multiple virtual worlds can exist, however, they will be limited in size. Hence, only a limited amount of land exists in every world, and it is designed such that more land cannot be added later. The rarity contributes to the appreciation in value.

How to build real estate in the metaverse?

STEP 1 – Decide on a platform: Creating real estate in the metaverse calls for various abilities. All major blockchain platforms, including Ethereum, Polygon, Algor, and Solana, provide the framework for creating a democratic and community-driven virtual environment. A platform must be chosen primarily to create a metaverse.

STEP 2 -Make a metaverse smart contract: Smart contracts are the cornerstone for properly harnessing the benefits of a virtual real estate metaverse ecosystem. Using an NFT smart contract, one can tokenize real estate assets into nonfungible entities.

STEP 3 – Meta space designing as per requirement: Meta spaces include apps, virtual conference rooms, virtual meeting rooms, and virtual home theatres. Meta space is a virtual setting that a user with a VR headset can access. After the platform is built, ideas for the metaverse real estate property begin to emerge. It comprises creating the architecture of the building.

Step 4 - Build a layer for interaction: This layer governs accessibility, navigation, communication protocols, and user controls. An easy illustration is when a user uses an entry pass to enter the main gate of a real estate establishment, like an event hall. Specifying the integration with external apps is necessary at this layer.

Step 5 - Build an interoperability layer:  Interoperability broadens the scope of the metaverse and raises involvement. If you want to build a completely functional virtual world, you must encourage cross-environment transactions. Choose a blockchain that enables speedy and secure payment gateway transactions as a result.

Following are some top metaverse real estate websites:

• The Sandbox – Properties on the Sandbox are identified as LAND, and you can find them on Sandbox's platform or buy them on some NFT exchanges operated by other parties, such as OpenSea and Rarible. Remember that in formal sales, NFT exchanges have typically been more expensive than LAND.
• Decentraland - Plots of land have consistently ranked at the top of the list of most costly sales in existing metaverses. Decentraland's celebrity and influencer tenants, as well as high profile corporate collaborations, significantly contribute to the platform's attraction.
• CryptoVoxels – With only 3,026 parcels at its beginning, this digital universe is one of the tiniest. These can be purchased through primary sales or through OpenSea, accepting USD and ETH as payment. Contrary to previous metaverses, CryptoVoxels has continued to grow and now has 7351 parcels. A land parcel is presently available for as little as 1.899 ETH, or about $5,335 USD.
• Somnium Space – This metaverse first appeared in 2018 and is well-known for its games and NFT artwork. It heavily emphasizes virtual reality offerings. There were 5,000 parcels of unevenly divided land in the platform in the start of 2022. However, more acreage should become available in the future. Plots of land can be easily obtained on OpenSea, and $CUBE is the local money in Somnium Space.

Sales volume of virtual plots of land in the metaverse:

KEY HIGHLIGHTS (As on Q3 2022):

• The market cap of the virtual real estate market is $1.5Bn, which is at its lowest point in 2022.
• Virtual real estate accounts for approximately 14% of NFT trading volume.
• Somnium Space is the only world whose land appreciated in price in Q3 2022.
• Most land holders either hold land for less than 7 days or more than 6 months.
• The price of land in NFT worlds dropped 80% after Minecraft announced intentions to block NFTs and blockchain integration.

Metaverse Real Estate Market 2022–2028

According to Brandessence market study, Metaverse real estate market is projected to record a CAGR of 31.2% from 2022 to 2028. The expanding popularity of NFTs in the metaverse environment and rising popularity of metaverse real estate globally are main drivers propelling the expansion of the global metaverse real estate market.

Conclusion:

Any investment carries risks and benefits, like any other newly developed technology. While many people may find the idea of metaverse land (and the absence of physical commodities) to be perplexing, there is little doubt about the potential of virtual reality, augmented reality, and artificial intelligence as well as related technologies.

The third quarter of 2022 saw a sharp decline in trade volume has shown what many predicted for months—that the crypto market is currently experiencing a winter. The previous crypto winter ran roughly from January 2018 to December 2020. The acceptance of the metaverse as a whole, rather than just the cryptocurrency markets, has an impact on virtual real estate as an asset class. Although metaverse is still a young and emerging idea, it could be the driving force behind virtual real estate surviving this crypto winter.

Despite most land prices falling, focusing on proposals that are still developing and providing utility to their consumers is crucial. These are the worlds that will last, and their lands will eventually appreciate in value.

As investors prepare for a global recession, trading volume in virtual real estate, an asset class impacted by cryptocurrency markets and general metaverse adoption, has fallen sharply in Q3 2022.